An unfavorable production volume variance ________ manufacturing costs on the ________ income statement.
A) decreases; variable costing
B) increases; variable costing
C) decreases; absorption costing
D) increases; absorption costing

Question

Quizplus · Accepted Answer

An unfavorable production volume variance means that the actual production volume is less than the expected production volume. This results in fixed manufacturing costs being spread over a smaller number of units, increasing the fixed overhead cost per unit, which in turn increases the cost of goods sold on the absorption costing income statement. Therefore, the correct answer is D.

An Unfavorable Production Volume Variance ________ Manufacturing Costs on the ________

An Unfavorable Production Volume Variance Manufacturing Costs on the